USD/CAD hovering around 1.3100, ADP report and Canadian GDP in focus

Having risen beyond 200-day SMA to test the highest level since August 10, the USD/CAD pair retraced from session peak and is now consolidating around 1.3100 handle.

On Tuesday, the major extended its sharp rebound from Friday's swing low level of 1.2830 and surged past the very important 200-day SMA amid broad based US Dollar strength on the back of an unexpected jump in the Conference Board's consumer confidence index. 

Moreover, renewed weakness in crude oil prices was seen weighing on the commodity-linked currency, loonie on Tuesday. Adding to this, a sharp decline in the price of raw materials purchased by manufacturers in Canada negated slightly lower-than-expected rise in the Canadian current account deficit data. 

Next in focus would be the ADP report on US private sector employment details and the monthly release of Canadian GDP print, later during NA trading session. On Wednesday, traders will also confront the release of Chicago PMI and pending home sales data from the US. 

However, the keenly watched US monthly employment report, due for release on Friday, remains an important factor in determining the Federal Reserve's next monetary policy action and would eventually drive the greenback in the near-term. 

Technical levels to watch

The 200-day SMA resistance break near 1.3065-60 region now seems to act as immediate support. Weakness below this immediate resistance might now be bought into and hence, is likely to limit further downside near 1.3030-20 support area. On the upside, sustained strength above 1.3100 handle seems to continue boosting the pair initially towards 1.3150 intermediate resistance and eventually towards monthly high resistance near 1.3200 round figure mark.